Title Insurance

Purpose of Title Insurance
The primary function of title insurance is to eliminate risk and prevent losses. It protects your legal rights over the property, occupancy, use, control and disposition of the property.

Title Search / Commitment
Before issuing a policy, the title insurance agency will perform an extensive search of relevant public and historic records related to the property. The search may be performed by title agency personnel or the title agency’s underwriter(s) using public records. A title insurance commitment is issued only after these records are examined and a determination is made as to the interests, liens and encumbrances to the said property.

Two Types of Title Insurance Policies

Loan Policy
A loan policy is issued to the lender insuring that they have a valid, enforceable lien on the real estate that you (the borrower) have used as collateral. The loan policy is needed to cover the amount of the mortgage and is used to protect the lenders investment. The policy amount will decrease each year and eventually disappear as the loan is paid off.

Owner’s Policy
An Owner’s policy is issued to you, the owner of the property, to protect you against any title defects that could potentially put your equity at risk. In the event a valid claim is filed, the policy will cover any financial loss up to the full amount of the owners title policy issued, as well as the cost of any legal defense of your title. You pay a one time premium and the policy will last as long as you or your heirs have an interest in the property.